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2011 Cottonseed Prices: April

Cottonseed Supply/Demand Balance Sheet(000 tons)
Yrs beg Aug 1USDA

USDA

April/ USDAApril/ USDAApril/ CSD
 

2007/08

2008/09

2009/10E

2010/11F

2010/11F

Beg. Stocks

489

643

514

342

342

Imports

3

0

24

0

0

Production

6589

4300

4149

6191

6210

Total Supply

7080

4943

4687

6533

6552

Crush

2706

2240

1900

2500

2450

Exports

599

191

291

300

310
Feed, Seed, & “Other”31321999215432903187

Total Disappearance

64374429430560905974

End Stocks

643

514

342

443

605

COTTONSEED fob points
Prices 4-15-10Bid / Offer / TradeYr Ago
Southeast($/ton)

No. Carolina

Spot

265b  /   270-275o

188o

(as ginned)

OND

185-188o  /   185t

130t

So. Carolina

Spot

265b  /   270o

188o

(as ginned)

OND

175b  /   185o

136o

Georgia So.

Spot

268-270b  /   272-275o

185-187o

(as ginned)

OND

175b  /   185o

135o

Mid-South($/ton)

Memphis No.

Spot

288-290o

203-205t

 

My-Ag

293-295o

210o

(as ginned)

OND

215b  /   220o

160t

MO Bootheel

Spot

290o

205o

(as ginned)

OND

220o

155-157o

Southwest($/ton)

West Texas

Spot

305-308o

205o/t

 

My-Sp

315o

210o

(as ginned)

OND

250o

158t

Far West($/ton)

Arizona

Spot.

340b  /   340t

255o

Cal. Corc. N

Spot

380o

285-290o

& Stockton

My-Sp

385-390o

285o

 

OND

325o

245o

Specially Processed Products($/ton)

Easi Flo ™ Courtland, AL

Spot

330o

225o

b = bid o = offer t = trade n/a = not available

COTTONSEED dlvd. points
Prices 4-15-10DumpHopperLive FloorRail
Northeast($/ton)

W. New York

Spot

337o

 

 

 

 

OND

227o

   

SE Pennsylvania

Spot

310o

 

 

 

 

OND

220o

   
NE Ohio

Spot

337o

   

 

OND

237o

 

 

 

Midwest($/ton)

MI (Grand Rpds.)

Spot

340o

 

 

 

 

OND

247o

 

 

 

MN (Rochester)

Spot

 

340o

349-350o

 

 

Ap-Ag

 

345o

353-355o

 

WI (Madison)

Spot

 

337-340o

349-350o

 

 

Ap-Ag

 

335-345o

350-355o

 

Southwest($/ton)

Texas / Dublin-

Spot

 

335o

 

 

Stephenville

Ap-Sp

 

342o

  
Rail - fob track points($/ton)

Laredo TX

(Mid-Bridge)

Spot

 

 

 

360o

California

Spot

 

 

 

368o

Idaho (UP)

Spot

 

 

 

370t

 

AMJ

 

 

 

375o

WA/OR (BN)

Spot

 

 

 

385o

 

AMJ

 

 

 

390o

b = bid o = offer t = trade n/a = not available

Cottonseed Dairy Buyer Profiles

GROUP 1: Base demand group that will formulate cottonseed in at a 4-6 lb. inclusion rate regardless of price.
GROUP 2: Formulates at a 2-3 lb. inclusion rate regardless of price, and would like to feed at the 4-6 lb. level. However, the last 2-4 lb. is price sensitive.
GROUP 3: This is the major swing factor for cottonseed demand. They enter the market when the price is right or other factors prevail (i.e. short hay supplies), and will subsequently exit when other opportunities exist.
GROUP 4: This group does not have access to, or the ability to incorporate whole cottonseed into their rations. However over time, dairymen in this group will migrate up into Groups 1, 2 or 3.


USDA PROSPECTIVE PLANTINGS: While cotton acres are projected to grow, results were lower than what many analysts anticipated. USDA’s forecast was 634,000 acres below expectations, as the average trade estimate was 13.2 million acres. The strong price reaction to the report from lint markets opens the possibility of there being more cotton acres planted than what the report suggests.

Similar to last year, Texas is projected to have the largest increase in cotton acres, up 550,000. The runner up is North Carolina with an expected increase of 200,000 acres compared to last season. The third largest state increase came from Georgia up 120,000 acres, which bested Mississippi’s increase by 10,000 acres. The total year over year growth of 1.5 million acres suggests that on average every state managed to increase plantings by 90,000 acres.

Regionally, the Southeast managed to have the largest increase on a percentage basis, but the Southwest still has the largest contribution in total acres. Due to depleted soil moisture conditions in the Southwest, the Southeast might contribute more cottonseed than the Southwest. With an average level of abandonment in Texas and average yields, cottonseed production should be over 6.4 million tons. However, if the drought conditions in West Texas persist and intensify, it is possible that production will end up being below this level.

USDA - US 2011 Regional Cotton Plantings Forecast (000 acres)

COTTONSEED MARKET: Over the past month there has been dramatic price strength fueled by new crop supply concerns. Without any improvement to the drought situation in Texas, the mindset of market participants has been unchanged and offers continue to edge higher. Even at these higher prices there have been a few end users coming to market to cover their immediate needs. However, prices appear to be reaching a level where end users are beginning to resist buying. Dairy profitability is being squeezed by lower milk prices and higher feed costs. It is possible that if other feed ingredients soften, then whole cottonseed prices will need to rollback. But, as long as oil mills continue to hold the majority of available supply, price will stay stout.

In the Southeast, there have been a few export inquiries that have shown up in the market as well, but nothing major has traded. Conditions in the region are considered ideal for planting to kick off next week, thanks to frequent rains over the past several weeks and warm temperatures. Mid-South offerings have lagged its neighbors, but lacks active buyers. Prices in West Texas continue to climb on concerns about dry conditions. Local dairy demand has softened. New crop offers have climbed on drought concerns. California prices continue to move higher to keep pace with eastern markets in order to cover replacement costs. Given the strong prices, demand has been limited. In general forward offers are sketchy, due to limited offerings and the lack of trading. End users are expected to use less cottonseed at these price levels.

COTTONSEED BALANCE SHEET: USDA left their balance sheet unchanged with levels shown last month. USDA’s 2010/11 average price of soybean oil had the low side of its range increase by two cents. This is based on projected improvements to demand for vegetable oils and expectations for tighter supply which should be supportive for cottonseed oil prices and whole cottonseed markets also.

The Cottonseed Digest’s balance sheet had a few changes. Exports were raised a modest 10,000 tons. Strong buying of Australian seed from China suggests that remaining markets will need to buy from the US. Recently there has been renewed export buying interest in the market. In 3 of the past 5 years, exports have been greater in the last half of the year. For the balance of the season, total exports will need to be larger than last year for the remaining months by a couple hundred tons, to reach the projected level.

Crushing was lowered 50,000 tons as runtimes this year have not been as strong as anticipated even though economics have been favorable. During the last half of the season, crushing activity will need to improve to meet demand. For the next couple months, the crush will need to exceed last year’s pace by roughly 37,000 tons per month on average. The bulk of the increase will need to be seen in March and April data, or the crush will need to be adjusted lower.

The Feed, Seed and Other category was lowered 58,000 tons, as stout prices and an outlook of narrow margins for dairy producers is apt to limit end user feed demand. In addition, the dry conditions in the Southwest suggest that the oil mills will sell less of their seed in storage than earlier projected. The lack of confidence in availability of new crop will result in oil mills carrying over inventories into next year for crushing. Ending stocks were raised 98,000 tons. The stocks-to-use ratio was increased to 10%, which is similar to the levels from the 07/08 and 08/09 crop years.










For weekly cottonseed pricing and commentary contact:

James Bueltel
Senior Analyst/Editor
Informa Economics, Inc.
3464 Washington Drive, Suite 120
Eagan, MN 55122
Direct: 651-925-1052
Main: 651-925-1060
Fax: 651-925-1061
james.bueltel@informaecon.com
www.Informaecon.com


Every effort has been made to assure the accuracy of the information and market data which is provided in this publication as a compilation for the use of its readers. Information has been obtained by Informa Economics, Inc. from sources believed to be reliable. However, because of the possibility of human or mechanical error, Informa does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.

Published by Informa Economics, Inc., 3464 Washington Drive, Suite 102, Eagan, MN 55122-1438.

 

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